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Eastman Kodak (KODK)

Participants
Paul Dils Chief Tax Officer and Director, IR
Jim Continenza Executive Chairman and CEO
David Bullwinkle CFO
Call transcript
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Operator

Thank you for standing by, and welcome to Eastman Kodak’s Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. I would now like to hand the call over to Paul Dils.

Paul Dils

Thank you, and good afternoon, everyone. I am Paul Dils, Eastman Kodak Company’s Chief Tax Officer and Director of Investor Relations. quarter year fourth earnings Kodak’s to and XXXX full call. Welcome p.m. X:XX At afternoon, XX-K for financial Form filed XXXX. issued this its on and Kodak its release results

You today’s webcast center may investor.kodak.com. presentation our at on investor for access the call and

be obligation Important in statements expressed include, statements. or certain cause time. update date and by their events statements no those Kodak’s the During forward-looking U.S. cautionary more persons or or defined in to presentation statements reflect arise could apply the assumptions. factors from and expectations in or qualified the actual with Reform results of made unanticipated from this the this differ in and by uncertainties Securities or time be that and materially statements materially anticipated actual detail or There undertakes Kodak forward-looking Exchange differ that events attributable Litigation date as these XXXX. Securities various as risks, filings revise to of are from forward-looking All Kodak in the today’s other results referenced Private described Kodak’s are will results from among forward-looking to circumstances call, events Act events. to presentation. we the statements. factors statements forward-looking Kodak’s statements reflect or included others, Commission may making that entirety may to after differ occurrence the the may behalf cause based Future of only to upon on forward-looking its to forward-looking other the of factors expressly All acting or

Bullwinkle, that provided contains non-GAAP Chief issued investor Executive presentation the provided are the Kodak’s been release Financial Continenza, Reconciliations comparable within have the GAAP the on and David investor.kodak.com. to Kodak. and with Officer; Executive call Chief Chairman presentation of release certain just in In our Speakers at directly website most deemed are and on and addition, measures center our measures. today’s the Jim measures Officer

formal today’s call. We not be holding a will Q&A during

Investor the turn will always, to the available follow-up. I As for Jim. team call now Relations over is

Jim Continenza

call Welcome, joining everyone, quarter investor and you Kodak. the for fourth for thank

X. improvement, slide performance, natural overall gas, rapid and strong resource inflationary am our electricity, including and full in labor, to year pleased chain reflecting Turning raw with supply despite I constraints, issues. rising costs continued materials, shipping pressures

aggressive pricing. unprecedented including addition of In the we actions pressure impact increases, to have taking mitigate cost surrounding market variable and these the workforce, been to surcharges

pass to continue take along to increases We these our will ongoing actions to customers.

operate to We our on continue as One Kodak, customer focusing first.

the continued announced Demand & We the execute This PRINERGY for highlights XXXX. press access the earned new We the October, prior to of XXXX Kodak Association foreign to we million by innovation EDP new year. also workflow excluding Award year-to-date plan Digital navigate will Folding $XXX point KODAK the war by continued pandemic revenues continue increased debt compared Print million created Press to remain When the of net introducing like Carton million European - solutions. exchange, compared XX% or of the Digital also March digital committed In and On Press. the print. another in revenue or in the software, XX% ASCEND with compared invest Industrial category. Finishing out Solutions prior Kodak Solution our to prestigious press, and $XXX the in in digital revolutionary Best grow I’d year impact reduced impacts period. as our we Ukraine. includes our long-term $XXX to increase Performance to

to Turning X. slide

volumes increased our and PROSPER year. units. Kodak Plates including annuities And Process-Free other We for print the business, continue SONORA overall to business grow Kodak in

focus our business to growth chemicals, to continues profitability. print, on on focus provide turning solutions, competencies innovation, strategy the and materials core in environmentally long-term advanced sustainable and Our

XX-K disclosed on and coating come within material experience deep and filing, working from EV film on energy initiatives in multiple As over These layering strength our of various and century our substrates we in new stages group are commercialization in of expertise initiatives chemistry storage new to the leverage are in that include manufacturing. AMC battery manufacturing. a in

maximum million EV started capacity meters. of started for production square storage limited with meters of X square coating energy approximately have million substrates We XX materials. We and a

continue our coating technology. proprietary commercialize pleased The expertise coating leverage introduce will blocking I’m is light carbon-less product opportunities with in existing and of a We an designed to U.S. to light plan range coated to to management offer to compatibility fabric We branded unmatched coating extensive apply to the our superior explore produce properties KODALUX. to substrates fabrics. technology

the a in We fabrics Rochester, to Park, coat Eastman in are coating currently machine completing New York. installation of full-scale located Business

X. slide to Turning

We’re excited antennas. to introduce transparent

manufacture and to excited us antennas the high-resolution excellent It commercial expertise. requiring technology and I’m frequency and micro-wire applications copper performance. will proprietary optical introduce reagent our manufacturing. automotive, leveraging printing are transparent other industry radio to for We allow

brand As in manufacture continue of for applications. facility started and construction million we healthcare approximately an to we reagents have the to leverage expertise chemicals, $XX our trusted

out healthcare facility. volumes are a discuss Dave new XXXX manufacturing capacity the the plan we FDA pursue will cGMP turn the the of for room manufacture and it testing in We currently industry. part to of to clean I utilize over to process to results. facility building now reagents As financial a the plan to as certification investment, of limited

David Bullwinkle

XXXX, ended XX-K for Jim, Today, year its December good afternoon. Thanks, Exchange and filed Securities the Commission. Company XX, and with the Form the

million. related derivative a related changes settlements extinguishment noncash in sale employee changes allowances to on expense the related $XXX full debt, to $X to $XXX of changes results On to the noncash income receivable million a of Adjusting as million, loss entirety. related year. the for in recommend related fair derivative million by embedded related for fair revenues and this I to the increase million to loss noncash changes foreign billion million U.S. trade flow compared billion $X favorable its value results, impact $X.XXX of an million assets embedded of operational compared U.S. to related result $X assets. million XXXX, related million tax in and for will million EBITDA sale increase X, the value outside or release, we read expense of XXXX. net of related our for in include reported cash reported basis, to in $X share to the prior $XX loss I of million prior in company filing XXXX of $X.XX On reserves, we related The of you impairment, accounts The employee million the in a and in GAAP $X to as $X for million the details name of XXXX. slide always, the in on compared reserves, an to in earnings As $X we reserves, exchange benefit a net of year net $XXX results to income to of XXXX on include of $XX of $XXX $XXX $X on million reported XXXX a the legal million valuation liabilities, gain liability benefit net revenue $XX features, increased expense improvement the million deferred

a current income of to for year adjusted $XX compared $XX the compared impact was the was million in and million XXXX. million prior the net EBITDA prior these of $X XXXX year. in Excluding XXXX negative to items, adjusted income net million Operational $X

ongoing more manufacturing cost furloughs beginning by in results in pay and an largely increases operational savings and XXXX. increased Operational from reserves, year-over-year Excluding global impact from The improvement changes by current reserves operational in did $X is reported. EBITDA offset in much of significant Since prior and EBITDA receivable from than costs the temporary revenue increases January for prior the from in volume, benefit million reductions level employee EBITDA XXXX. unfavorable year these million in that foreign is the year the the for increase impact current improvement benefit of by in reinstated what the reductions favorably January were in year in in XXXX impacted adjusting was XXXX, operational year. EBITDA $XX not accounts ended of partially exchange in and

XXXX. annuity We we in have are Process-Free On basis, proud by full-year volumes for revenue Plates created the for SONORA a improved and XX%. the of improvements by XX% PROSPER improved

materials. also of and future growth We ULTRASTREAM advanced invest to continue in areas

million core maturing XXXX. financial Jim sheet to XXXX, into before improved term draw ability obligations access capital, of financial million, March of as provide a by series announced of during in up transactions. Kodak growth net provide term Company’s may new $XX for address delayed strategic to the the improved to largely those which initiatives XXXX. February in debt balance on additional our $XXX That well. transactions in XX, indicated that is Company which due of be $XXX commitment loans XXXX or Summarizing with the and entered since million strengthen to an Our March invest to a businesses. drawn loan our

million in A in convertible Series stock. issued Series preferred Company exchange stock million unsecured also stock $XXX from Series sale Series million common stock of issued preferred in $XXX issued for holder. preferred $XXX and million C million the same redeemed million $XX to raised $XXX B also We debt and preferred stock, in notes A The in of the $XX

in ABL time. of the These funding with growth. $XXX million sheet credit cash mentioned which incremental investing XXXX, balance to Jim provided these and fees, occurred incremental the to the due initiatives of in the also the and million during incremental which an provided provide the letter at provides is our Company extended the $XX expenses, for platform of future year liquidity after We investments. Company Company draw. with improvement, several same together amended transactions facility The delayed

ended Company from $XXX XX, on presented on Company cash the Moving slide of cash performance increase an X. XXXX XXXX. and The $XXX with million equivalents, million in December cash to

refinancing and from net approximately of of million consulting the cash As This as despite option above, stock the and bottom improvement in is $XX impact exercises, payments facility, improvement pay and costs, presented and the adjusting significant reductions transactions, furloughs mentioned letter manage. on project the to as for in portion proceeds occurred which increase slide, was million. funding proceeds year-over-year the foreign the well cash credit continue we and the equivalents $XX in exchange of excluding of from

than an our approximately team. As costs the aluminum to implemented more example, throughout basis these million by numerous mitigate been $XX increased but by were have offset measures annual that XXXX, costs by on an

aluminum the prices. Exchange as a continues fact, to above well London In trade historical price we into at Metal move XXXX, level

to compared has X,XXX March price January high of approximately approximately within the As XXXX, price the as X,XXX, LME euro of been but XXXX, as that X, period. as X,XXX of was X, approximately

electricity and these of also In and input labor, shipping, these have materials, war supply will addition, customers. as execute The surcharges, challenges we the other mitigate continuity continue significantly. price chemicals and our plan other costs well maintain factory gas impacts, risen of natural and our and we in and through efficiencies Ukraine to as to like strive actions further for exacerbates price raw availability. impacts as To on continuity supply distribution

decrease cash cash $XX Cash by usage used by financing used an of of by million million during increase $XX which escrows activities at the referred credit cash million, letter the million, changes $X need to year, XXXX reduced million QX required cash operating change from ongoing announced the after XXXX. financing sheet created in million of cash addition provided including increase the $XX from transactions million the $XX and to million, facility on reflects $XX during other our efficient increased March a year. driven in December end primarily a payable $XX $XX as by by and $XX I various in was financial cash million balance driven in Cash and that of by point, under of cash team of $XX XXXX, by earlier. for Xst, investing accounts prior inventory to in compared significant Accounts to the Subsequent secure refinancing by $XX The from sheet. and XXXX net million was million. million $XX Restricted and of activities earnings liabilities used compared of obligations. $XX fees of increased has prior of in working which receivable new million, Restricted year primarily activities During transactions in million the to included capital restrictions more year. million by XX, a represents used effort cash increased Cash on in million. cash $XXX was restricted XXXX. cash million expenses $XX balance to activities to the $X incremental was $XXX collateral provided

to We will restrictions on continue create Company. removing to liquidity for cash focus on the

Form discussion in I with back Finally, our applicable as the financial compliance XX-K, in we disclosed covenants. turn will now Jim. all to remain

Jim Continenza

summary, challenging in to business through Dave. first we In growth unusual continued segments years. you, XXXX, in delivered the in all Thank environment, navigate for and an time revenue

satisfaction and key of share print ongoing strategy. which market We our our also saw reflect businesses, in the in increase customer achievements success

everything call chemicals, you on we the focus Eastman in We materials continue and in and in interest attending our in advanced Thank your Kodak. do. customers put and product print, invest first businesses innovations to continued for our core commercial

End of Q&A

Ladies participating. you gentlemen, concludes call. this conference today’s for and Thank

disconnect. You now may